IGEM response to the Department for Energy Security and Net Zero Select Committee's call for evidence on Keeping the Power On: Our Future Energy Technology Mix

Response from the Institution of Gas Engineers & Managers (IGEM) to the Department for Energy Security and Net Zero Select Committee's call for evidence on Keeping the Power On: Our Future Energy Technology Mix.

Introduction:

Licenced by the Engineering Council, IGEM is the professional engineering institution for gas – representing thousands of engineers, technicians and managers across the UK and overseas, and hundreds of businesses that are a significant part of the emerging hydrogen supply chain.

As advocates of excellence, IGEM’s core aim is to help all those involved with gas to achieve and maintain the highest standards of professional competence. Working with stakeholders from across the industry, we seek to inform current and future energy policy whilst representing the views of our members and the wider gas community.

IGEM fully supports the transition of the energy system to meet a net zero future and are playing a key role in supporting the evidence base for the application of low-carbon gases in the gas network. As well as developing the first Hydrogen Technical Standards, IGEM facilitated a change in regulations on the quality of gas allowed to be injected into the transmission and distribution network, to enable a higher proportion of greener gases such as biomethane and hydrogen. 

Our role across various industry and governmental groups sees us working directly with gas network companies, manufacturers, consultants, contractors, safety experts, academia, regulators, policy advisors and policy makers, to assess the evidence base and develop informed recommendations on the future of the gas grid.

We welcome the opportunity to respond to this call for evidence and aim to represent the collective views of IGEM Members and our gas industry stakeholders. We have selected questions from the call for evidence which are of greatest relevance to our members and provided our response below. 

1. Is the energy sector open enough to new generation technology?

The energy sector, overall, is open to new generation technology. The challenge is not the issue of openness of the sector, but of the ineffective or absent policies and mechanisms to encourage the aggressive scale and pace of innovation required to meet net zero by 2050, strengthen energy security and compete effectively in the global marketplace. 

The UK government’s Hydrogen Strategy and investments to date show promising commitments to harness the opportunity of hydrogen, in support of decarbonisation, economic growth, energy security and job creation. However there are various barriers that inhibit the necessary acceleration of innovation, delivery, investment, market and supply chain development. 

The gas industry and wider supply chain are awaiting key government policy decisions on hydrogen usage, particularly on issues such as hydrogen blending, the support for hydrogen-ready boilers and the application of hydrogen for domestic heating. 

Hydrogen producers are ready to start blending hydrogen into the existing gas grid, however, changes to regulations, public consultation and an ultimate decision on blending is still pending. 

We welcome the recent publication of the shortlisted Hydrogen Allocation Round 1 (HAR1) electrolytic hydrogen projects that have progressed to detailed negotiations. An increase in pace is required across government funding mechanisms and programmes to capitalise on the sector’s readiness. 

We echo the recent comments from the Climate Change Committee (CCC) urging government to “publish a comprehensive long-term strategy for the delivery of a decarbonised, resilient, power system by 2035.” As re-affirmed in August’s Hydrogen Update to the Market, we eagerly await the government’s hydrogen production delivery roadmap, which is due to be published this year, outlining how the government foresees hydrogen production scaling up over the next decade. Without this clarity of direction and ambition, we risk diminishing vital progress on power generation and hydrogen infrastructure development.

2. Does the Government sufficiently support development of innovative energy infrastructure?

IGEM commend the government’s progress to date on developing energy infrastructure in support of its net zero commitments, including policy and funding mechanisms to support innovative hydrogen production and CCUS projects. However further commitment is needed to boost investment, remove barriers and progress decision making and delivery, at pace. 

We agree with the CCC’s comments that a “lack of a strategic direction [on hydrogen for heating] is creating systemic uncertainty” and we risk delays and missed opportunities for essential investment across hydrogen production, transport and storage infrastructure as a result. The government should proceed with ‘low-regrets’ infrastructure investment now, regardless of the decision on hydrogen for heating, given the government and CCC consensus that hydrogen infrastructure will be required to decarbonise power and industry as a minimum. 

Coordinated planning of infrastructure is essential as part of a whole-systems approach, across a range of energy vectors and will enable the regions to capitalise on shared network infrastructure and local resources. Recent research by the Energy Systems Catapult identified that a failure to coordinate infrastructure planning in this way would be a considerable barrier to hydrogen providing flexibility within the wider future energy system¹. 

It is not always recognised that gas distribution pipes serve a range of demands that all share the same network. Distributed industry outside of major clusters, flexible power generation and homes are all located together in cities, towns and villages. The government must avoid a siloed decision on hydrogen utilisation as there are other local demands that are dependent on hydrogen, such as balancing local electricity supply. It is truly a whole system, economy wide matter, rather than a sector by sector consideration. 

The intended role of the FSO in planning hydrogen infrastructure, only expedites the need for it to be up and running urgently, with hydrogen included within its remit as soon as possible to optimise existing assets and new infrastructure as part of a whole systems analysis. 

To further support energy infrastructure innovation, more action is needed to help levelize the playing field to help the UK compete internationally. Long term, stable energy policy and levers that encourage private investment are needed to ensure that the UK can reassert its position in an increasingly competitive global market. 

Industry is ready to deliver innovative energy infrastructure now. Accelerating delivery of the government’s upcoming hydrogen networks pathway and transport and storage business models will go a long way in providing clarity and confidence that appropriate funding, regulation and commercial frameworks will be put in place to support innovation. 

3. Is the Governments plan for energy security sufficiently long term?

IGEM believe that the government’s plan for energy security is not sufficiently long term. Although it is moving in the right direction there remain concerns over approach, scale and pace needed to achieve energy security by 2050 and beyond. 

A whole-systems, cross vector approach is essential to maximise energy security for the UK. An overreliance on electrification is impractical, due to the challenges of energy storage, intermittency, peak energy demand and the sheer scale of infrastructure required by 2050. More attention is needed to a consumer-centric, multi-vector approach which includes major roles for hydrogen, wind, nuclear, energy efficiency and demand response that are optimised for lowest total system cost and balanced across local, regional and national levels.

We agree with the CCC’s position that ‘pace should be prioritised over perfection’. Bold action is needed to meet our net zero target by 2050 as well as anticipate needs beyond 2050 – key to this is the recognition that multiple options for decarbonisation should be supported until an optimum balance is established. Any attempt to constrain the potential uses for hydrogen may prove detrimental to our energy security, the success of our long term decarbonisation efforts, the economic benefits of early mover status and our ability to compete in a global market. Lessons should be learned from the history of CCUS policy to avoid the same mistake being made with hydrogen, and experiencing the time lost and cumulative emissions associated with not acting and investing earlier. 

4. What current technologies could usefully be deployed at scale to deliver better energy security in the UK?

There are various technologies that can be deployed to deliver improved energy security for the UK.

Since the decline of coal-fired power generation, gas has performed an increasingly important role in ensuring both the flexibility and security of UK energy. Research by the Carbon Trust, in their Flexibility in Great Britain report, evidences how crucial flexibility is for the security, agility and resilience of our future energy system, as well as minimising the cost of the energy transition². Each year the gas network provides around 100 TWh of cumulative daily linepack flexibility, offering a method of storing energy that is very low cost compared to other options, such as batteries and pumped storage³.

Energy security can be enhanced by maintaining this interconnection between the electricity and gas networks. The eventual replacement of natural gas with low-carbon hydrogen presents the opportunity to decarbonise our gas network, whilst preserving the inherent flexibility and security that gas offers when renewable electricity supply is insufficient. 

Blue hydrogen, produced through methane reformation (most likely Auto-Thermal Reformation - ATR) combined with CCUS can further support energy security by leveraging our remaining fossil fuel reserves, utilising salt caverns and redundant gas fields to store the carbon by-product and tying up production to hydrogen demand – recognising that this is an interim, transitional step towards renewably generated green hydrogen. Utilising UK Continental Shelf reserves for UK supply supports the North Sea transition and reduces our reliance on more carbon intensive LNG imports.

Recent analysis by DNV presents the main rationale for hydrogen storage development at scale in the UK⁴. They set out an energy storage strategy that highlights: 

• The need for energy storage at scale to maximise the energy recovery from the UK’s vast wind and other variable renewable resources – to balance significant periods of mismatch between renewable energy supply and energy demand, within-day, on cold winter weeks, and seasonally.
• Hydrogen storage will play a major and essential role, as batteries are short duration and not at sufficient scale, and there are limited new pumped hydro sites.
• Physical hydrogen storage is needed in the UK - a level of indigenous hydrogen production and storage is needed to support energy security, particularly in times of turbulent geopolitics.
• Only geological hydrogen storage can deliver at the scale needed, within the timescales for net zero - Refinery operators have shown for many years that salt caverns can store industrial grade hydrogen safely, respond quickly to meet within-day demand fluctuations and provide long term storage. This makes salt cavern storage a flexible and technologically ready solution capable of managing multiple customer requirements.
• Geological hydrogen storage should be supported through a viable business model now, to ensure it comes online in the 2030s.

As a locational example, hydrogen salt cavern storage (1.3TWh) in Cheshire is a key part of the HyNet Track 1 industrial cluster development, predominantly for the benefit of meeting the variable demands from hydrogen-fuelled electricity generation, but also to provide wider system resilience. This is 40x the storage capacity of the new pumped hydro scheme announced for Coire Ghlas.

5. Are there technologies that have not been able to develop their potential and should be abandoned?

No answer.

6. What energy generation mix will get us to net zero the quickest in the most affordable way?

A balanced portfolio of energy vectors, including low-carbon gases, renewable electricity and nuclear, as part of a coordinated, whole system approach will be required to achieve net zero. Only by considering energy system planning as a whole will efficiencies be maximised and therefore costs minimised. However it should be noted that the quickest approach may not necessarily be the cheapest approach and vice versa, due to a range of complex and interconnected variables affecting the energy system and markets. 
Research conducted by the CCC, as part of its Sixth Carbon Budget⁵, recommends a ‘Balanced Net Zero Pathway’, where hydrogen generation provides an important contribution to net zero by 2050 alongside demand-side action, electrification and natural and engineered greenhouse gas removals (GGRs). This approach recognises that much of the flexibility provided to the electricity system today comes from gas-fired generation. Increased renewable generation and the gradual decline in electricity demand has reduced the annual share of generation from gas from 46% in 2010 to 40% in 2021. However, our reliance on gas generation capacity has increased, with the range of generation coming from gas having widened to 7-70% of the generation mix at any one time. Maintaining system flexibility and resilience to meet net zero is a position recognised by the CCC and is echoed in its recent report ‘Delivering a reliable decarbonised power system’, where it calls for:

• New low-carbon back-up generation, with hydrogen-based power stations and some continued use of fossil gas, made low-carbon through use of carbon capture and storage.
• New storage solutions, beyond simply the use of batteries. Most critical is the use of surplus generation to produce hydrogen through electrolysis, providing long-term storage to generate electricity at a later date.

Using the decarbonisation of heat as an example for cost modelling routes to net zero, a study by Imperial College London analysing whole energy system modelling⁶ found that of the heat decarbonisation scenarios they modelled (across four different hydrogen and electricity utilisation scenarios), all of them can reach net zero emissions at comparable 2050 total annual costs. The analyses above demonstrate that, given scenarios of comparable cost, an approach utilising hydrogen is preferable as it offers more flexibility and resilience within the energy system than a fully electrified scenario, as well as greater energy security and more optionality for central government, local government and consumers to deploy the right technologies in the right places.

7. Are the energy solutions universal across the UK or are there regional and local approaches on fuel and energy?

Energy solutions will need to deliver a balance of assets across national, regional and local levels depending on a range of factors such as local infrastructure, energy sources and geography of the area – a one size fits all solution will not produce an optimum outcome. 

Energy was once all locally delivered in undertakings and developing a national system brought many benefits, however the current and future system is increasingly local and a balance of investment will be needed to deliver a secure, efficient system at the lowest possible cost to society.

Positioning of industrial clusters will impact regional approaches, where hydrogen will need to be produced and transported to power stations for flexible electricity generation as a critical part of delivering a reliable decarbonised power system. These transportation pipelines will also need to supply hydrogen from the production plants to industrial consumers and be sized to serve wider demand for hydrogen which may materialise across the economy, such as the current and widespread distributed flexible electricity generation, transport refuellers and for domestic heating and cooking.

Areas close to considerable wind power generation may be able to make use of the renewable electricity locally, but also export it more widely, as either electrons and/or hydrogen molecules, to areas with deficient supplies. Detailed system analysis will support the planning of the infrastructure needed, including electrolysis plant capacity in these regions. Areas close to major hydrogen consumers may benefit from hydrogen production with CCS for power generation, local industry, transport and heat in buildings.

The decarbonisation of heating highlights the need for local approaches that account for the significant variation in energy demand and housing stock. Spatial analysis undertaken by Element Energy⁷, on behalf of Cadent, identified that 42% of gas grid connected homes are within industrial cluster areas, where the potential for a hydrogen heating choice for consumers is substantial (using stand-alone hydrogen boilers or as part of hybrid heating systems). Hydrogen transmission infrastructure and further distribution network rollout of hydrogen can provide a networked supply to non-cluster areas to extend this choice.

The work of National Gas on Project Union (the national ‘Hydrogen Backbone’) is key for a secure and balanced hydrogen supply between UK industrial clusters and power generation. It will also be an important enabler for delivering hydrogen to areas outside of major industrial clusters for off-taking to distribution systems that aid local solutions.
 

<sup><sub>1. Energy Systems Catapult, 7 barriers to hydrogen use in energy system flexibility, July 2023
2. The Carbon Trust, Flexibility in Great Britain report, May 2021
3. Dr Grant Wilson; University of Birmingham, Estimated cost of Great Britain’s linepack flexibility per kWh of natural gas, January 2022
4. DNV, Energy Storage Strategy – Narrative, February 2023
5. Climate Change Committee, The Sixth Carbon Budget: The UK’s path to Net Zero, December 2020
6. Imperial College London, Whole Energy System Modelling for Heat Decarbonisation, August 2021
7. Cadent, The Future Role of Gas in Transport, Green Gas Transport Pathway, 2021</sub></sup>